1. Field of Invention
This invention relates generally to systems for processing merchandising coupons which, when presented at a checkout counter in a retail store, entitle a customer to specified discounts on those purchased items identified by the coupons, and more particularly to a computer-controlled system in which a universal coupon blank is printed in dispensers at supermarket sites to provide discount coupons for particular products, making it possible for shoppers to receive, on demand, discount coupons on available items of merchandise.
2. Status of Prior Art
A merchandising coupon is often referred to as a "cents-off" or discount coupon; for the holder of the coupon, when purchasing the product identified on the coupon from the retailer, is given a specified discount. Such coupons fall into two basic classes--those printed and put into distribution by manufacturers, and those which retailers print for use in their stores.
The majority of merchandising coupons are authorized by the manufacturer of the product so that the manufacturer is required to pay to the retailer the face value of each coupon redeemed, plus certain handling charges. For example, on occasion the Coca-Cola Company runs ads which include a coupon offering 25.cent. towards the purchase of a pack of "Coca-Cola" bottles. The retailer who accepts this coupon gives the purchaser of the pack a 25.cent. reduction on the market price thereof. The retailer is then entitled to recover from the Coca-Cola Company this 25.cent. discount, plus seven cents for handling costs (or whatever other handling charge is indicated).
Despite the high cost of merchandising coupon transactions, the volume of coupon traffic has risen over the years to a phenomenal level. Thus in 1978, manufacturers distributed about 72 billion coupons, whereas in 1982, it amounted to almost 120 billion, and currently the amount is much higher. Though only a fraction of the many billions of coupons which are distributed are actually put to use by shoppers, the number of coupons which are redeemed still runs into the billions.
Experience has shown that cents-off coupons constitute a cost-effective promotional technique for stimulating consumers to try out a new product or to switch brands. Moreover, when sales of a given brand are flagging, discount coupons often serve to revive and even increase such sales. Discount coupons therefore benefit the consumer, the manufacturer and the retailer. According to an article which appeared in the Jun. 13, 1983 issue of Business Week, cents-off coupons appear to be a more effective marketing tool for stepping up sales than expensive TV commercials.
While in some instances coupons accepted by the retailer are redeemed by sending them directly back to the company making the product, most coupons first go through a clearing house where, after the coupons have been manually sorted, they are shipped by the clearing house to the respective manufacturers who then invoice the money payable to the clearing house.
With existing procedures, the manufacturer has little control over the number of coupons redeemed. By statistical analysis of previous coupon promotions, the manufacturer can make a projection of anticipated redemptions. However, if a coupons was issued for a larger than usual discount and the redemption rate was higher than expected, the manufacturer may then incur a greater promotional expense than he projected.
Also, with the existing procedures, the time elapsing between issuance and redemption of a coupon can be many months, particularly if the coupon carries an expiration date which gives the shopper a long term in which to use the coupon. This makes planning for future promotions difficult, for information on coupon redemptions in previous promotions is slow to arrive.
Quite distinct from these problems is the failure of many shoppers to take advantage of discount coupons. While a shopper may save coupons mailed to him or may clip and file coupons appearing in newspapers and magazines, he often forgets to take them along when going shopping and therefore will not be induced to make a discretionary purchase or switch brands. Typically, a consumer will receive in the mail a discount coupon , say, for a new hair shampoo; but it will be several days before his next shopping trip, and by that time he may have forgotten about the coupon and will therefore purchase his usual undiscounted brand.
To overcome this drawback, the patent to Bissell et al., U.S. Pat. No. 4,124,109, discloses a coupon dispenser that can be installed in a supermarket and which dispenses a packet of printed discount coupons. In this dispenser, a packet is dispensed in response to a depositor who inserts a coin in a coin receptacle.
Existing merchandise coupons are printed on various types of paper or card stock in different sizes, shapes and formats. This makes it necessary for retail store employees, in order to avoid costly errors, to give each coupon careful handling. This handling would be greatly simplified if all coupons, regardless of their source, were in a single, standardized format.
Another difficulty experienced with standard merchandising coupons is that they are not compatible with modern supermarket computerized checkout systems which utilize the universal product code (UPC). To appreciate this difficulty, one must bear in mind that in less than fifty years, the grocery industry has evolved from one characterized by small neighborhood stores to an industrial giant with many supermarkets, and that the variety of foods and household goods now available to the consumer in many supermarkets has grown from less than 3,000 items in 1946 to well over 10,000 items.
The UPC system is designed to cope not only with the problem of efficiently and accurately handling the enormous number of items sold in a modern supermarket, but also with the matter of pricing these items. In this system, instead of marking each item of merchandise with its selling price and revising the marking on the box or container every time a price change is made, the item only carries a symbol in the form of code indicia. At the checkout counter, the symbols appearing on the items purchased by the consumer are examined by an optical scanner whose output signal identifies each item as it is pulled across the scanner. The signal is sent to a computer terminal that automatically retrieves the item's name and price from a memory bank which is readily updated.
The terminal then displays a description of the item and its price, and it performs all of the calculations necessary for tax and change. The terminal prints a customer receipt listing and identifying all of the items purchased, giving the prices of items and the total amount to be paid.
Thus personnel at the checkout counter are relieved of the need to read the price appearing on the item and are not required with the UPC marked items to operate the keyboard on a register to enter the price of the items purchased, for these functions are carried out automatically by the system. But when the customer presents to a clerk at the checkout counter a "cents-off" coupon, then the existing UPC system is incapable of coping automatically with this transaction.
It is for this reason that existing UPC systems, such as the IBM 3660 supermarket system, are provided with a manually-operated digital keyboard functioning in conjunction with a mode keyboard. On the mode keyboard, separate keys exist for food stamps, refunds and other special situations, as well as for store merchandising coupons and manufacturers' merchandising coupons.
When a customer presents a manufacturer "cents-off" coupons, the clerk has to press the manufacturer's coupon key on the mode keyboard, after which he is required to key in the amount of the discount on the digital keyboard, so that a proper discount is accorded to the customer by the terminal. The discount is printed at the terminal and appears on the receipt.
This procedure for merchandising coupons is obviously time-consuming and subject to human error, and since, as explained previously, the current volume of merchandising coupons being traded is enormous, the productivity of the UPC system is materially impaired by the need to manually process such coupons. Moreover, the problem of misredemption is not alleviated by existing UPC systems, for the system honors these coupons, whether or not a purchase is made.
In the patent to Kaslow, U.S. Pat. No. 3,959,624, in order to expedite the handling of discount coupons, a UPC symbol is printed on each coupon which corresponds to the UPC symbol appearing on the product being discounted. The coupon also has printed thereon a symbol indicating that it is a coupon and not an item of merchandise. At the UPC checkout counter at the supermarket, first the UPC symbols on the items purchased are scanned and the coded information derived therefrom is stored. Then the discount coupons presented by the shopper are optically scanned and the coded information derived therefrom is checked in the terminal against the stored coded information taken from the purchased items. Only if a match is found is the customer granted the discount.
A coupon system in accordance with the invention is compatible with that disclosed in the Kaslow patent; and while the present system does not require UPC symbols to carry out its function, the coupons printed by the present system may also have UPC symbols impressed thereon for use in supermarkets which have UPC checkout terminals.
The present invention takes advantage of recent innovations in merchandising technology which make use of electronic signs installed at retail establishments including supermarkets, the signs being linked by satellite or cable to a remote computer. With this arrangement, a manufacturer who wishes to promote a particular product can buy display time on the signs in thousands of supermarkets to inform shoppers that his product, say CREST toothpaste is on sale today at $1.99.
But in order to make this purchase, the shopper must have the appropriate discount coupon, and the printing and distribution of such coupons takes weeks to implement. Moreover, in order for the manufacturer to know whether his discount coupon has been effective, it may take several weeks before he is fully informed as to the number of discount coupons that have been redeemed.
The competition for shelf space in high volume supermarkets which carry thousands of items is intense, and if a particular product is selling poorly, it will be supplanted by merchandise that sells better. With well known brands having an assured demand, this is no great problem, but if a manufacturer induces a supermarket to give shelf space to a newly-introduced product for which there is no established demand, he runs the risk that the product will be pulled by the retailer from the shelf should it fail to sell well.
It is desirable, therefore, that if a new product is being heavily promoted by way of discount coupons, that these coupons be made directly available to shoppers at the supermarket, for most shopper decisions are made at a point of purchase, not when the shopper sees a coupon in a magazine or newspaper. Also desirable is that the manufacturer be advised on-line, as it were, in regard to the volume of sales of a particular discounted item, for then should the volume be disappointing, he can further mark down the item by increasing the discount, or should the volume be greater than anticipated, he can decrease the discount. Existing discount coupon practices do not satisfy this requirement and are relatively inflexible.